"Free Roaming is Impractical"

IndiaTimes

June 18, 2013

The telecom regulator has lowered mobile phone roaming charges by up to 30% from next month and allowed operators to float conditional free roaming plans, offering relief to subscribers as well as some companies that were opposing removal of all charges.

The Telecom Regulatory Authority of India (Trai), however, refused to make the service completely free, as suggested by telecom minister Kapil Sibal earlier. "It is simply not practical," Trai chairman Rahul Khullar said on Monday. Roaming refers to facilities for making and receiving calls and SMSes when the subscriber is travelling outside his home zone.

As per the new rules, the maximum per minute charge for outgoing local and STD calls will be Re 1 and Rs 1.5, respectively, while roaming. Similarly, the cap on incoming calls on national roaming has been set at 75 paise per minute, compared with the Rs 1.75 at present.

This represents a 29% cut in local roaming tariff and 38% cut in outgoing STD calls for mobile phone users who at present pay an extra charge for calls when outside their home zone.

India has 22 telecom zones with operators offering different tariff plans. The lowering of charges will benefit about 13% of the over 860 million mobile phone users who utilise roaming services regularly. The Telecom Regulatory Authority has also allowed operators to offer two rate plans to their roaming customers: one with an option of free incoming calls and another in which each incoming call will be billed.

In addition to the roaming charges, Trai has allowed operators to offer special tariff vouchers and combo vouchers to part recover roaming revenue upfront.

The regulator has said it will review these regulations after a year and ascertain the level of overall reduction in tariffs. Explaining the rationale behind not making roaming completely free, Khullar said operators will not be able to recover their carriage costs when a consumer travels out of the home circle and roams on another carrier's network without paying any charges.

"Fully free roaming, which is home tariff equal to roaming tariff, plus incoming free, is simply not practical... It can't work," Khullar said.

Reliance Communications, which has been pushing for free roaming, however, said it was expecting more. "Roaming charges should have been completely done away with. This would be in the interests of consumers and grow the market, and be in keeping with the Hon'ble MOCIT's stated intent in NTP 2012," the Anil Ambani-promoted company said. As per estimates, the sector would have lost more than Rs 10,000 crore in revenue had roaming been made free nationwide.

Following Trai's announcement, Goldman Sachs said in a note to investors, "As the current tariffs for most packages in the market are largely in line with the new proposed ceilings, we do not expect most telcos to reduce tariffs to meet the new guidelines."PTI